Bitcoin’s Thursday-Saturday sell-off marked the largest-ever realized loss for the top cryptocurrency by market cap, with investors recording $7.3 billion in committed losses.
About 555,000 bitcoin traded in the $18,000-$23,000 range over three days, with many sellers originally buying BTC at much higher prices, according to research firm Glassnode.
Short-term holders achieved a spent output profit ratio that matched that of the 2018 bear market, meaning their overall gains have declined, while some long-term holders experienced “deep capitulation” after buying and selling at bitcoin’s all-time high of nearly $69,000 for closer to $18,000, per glass node.
“Almost all wallet cohorts, from shrimp to whales, are now showing massive unrealized losses, worse than in March 2020. The least profitable wallet cohort holds 1-100 BTC,” Glassnode reported.
GlobalBlock cryptocurrency analyst Marcus Sotiriou said Bitcoin may be on the verge of a temporary bottom as the cryptocurrency has historically bottomed when its supply percentage of profit (PSP) is reached 40% to 50%.
“It’s important to note when looking at this historical data that Bitcoin has not experienced a period of sustained inflation,” Sotiriou said in a statement Monday. “We may be nearing a generational low as more forced liquidations occur, but we cannot be confident of a sustained uptrend until inflation convincingly slows.”
Yuya Hasegawa, an analyst at Japanese cryptocurrency exchange Bitbank, also sees more potential downsides as Bitcoin’s PSP is just over 50%.
“Bitcoin’s weekend decline wasn’t deep enough, to put it simply,” Hasegawa wrote in a report Monday. “Bitcoin still has downside potential, but if its PSP falls below 50%, the price could finally bottom.”
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